This Blog is being maintained by Dr. Kevin C. Desouza. Dr. Desouza is on the faculty of the Information School at the University of Washington. The Blog will be used to provide updates on his current research projects – Leveraging Ideas for Organizational Innovation, and Demystifying the Link between
Innovation and Business Value.

Saturday, July 29, 2006

Almost all organizations employ contingent workers. These employees are hired to supplement the workforce of the organization. In most cases, these workers have specialized skills that are needed by the organization. In other cases, contingent workers are hired to manage the variable workload that might arise during peak operational times. In the past, most organizations viewed their contingent workers through an operational lens. Seldom were these workers looked upon as sources of innovation. The exception to this was when organizations hired academicians or management consultants for strategic briefing and consulting engagements.

Today, organizations have realized that they must look at contingent workers as sources of innovation (Desouza and Awazu, 2005a, 2005b). Contingent workers bring in fresh ideas, novel thoughts, new processes, and new mental models into the organization. Their creativeness and domain knowledge are almost impossible for organizations to build internally with limited amount of time and resources. Matusik and Hill (1998) studied the impact of contingent works on the competitive advantage via dissemination and creation of various types of knowledge. Nesheim (2003) extended the work of Matusik and Hill (1998). Nesheim (2003) conducted a survey of 26 Norwegian firms in computer services and found that firms operating in dynamic environments are utilizing external work arrangements on purpose for enhancing innovation activities.

Here are some of points that organizations need to consider when utilizing contingent workers.

1. Hire contingent workers to take advantage of their unique knowledge and skill sets. In order to do this, have a sense of where would you like to employ them in the innovation process (e.g. are they going to help in the generation of ideas or may be commercialization aspects?).

2. Balance between established sources of contingent workers to the newly emerging sources. Too often, organizations restrict themselves to consultants from the brand-name firms, this thinking is dangerous. Newer firms can be as good, if not better, sources for cutting-edge ideas. These firms may not have the track record, but this should not be used as an indicator of the quality of ideas.

3. Contingent workers, in many cases, especially when it comes to high-end knowledge work, serve multiple clients at a given time. The organization must be certain that adequate knowledge protection capabilities are in place to prevent knowledge from leaving the organization and being used elsewhere. Often, preventive measures call for excellent legal contracts and work assignment documents being prepared that demand adherence to tight security policies. As a rule, it may be best that contingent workers not be used in highly sensitive areas. In cases where an organization sees a need for contingent workers in these areas, it may want to think about hiring employees of the required caliber into the mainstream of the organization.

4. Knowledge hostility issues between contingent workers and the traditional workforce of the organization should not be ignored. The internal employees may demonstrate hostility towards the contingent workers due to the fear of job loss and envy of higher pay for the same work. These issues need to be managed, especially when the contingent workers are actually doing work for less. It is interesting to note that, in our experience, workers are less likely to get agitated when contingent workers are paid more than they are, than when they are paid less. The reason is economic threat –– paying external workers less indicates that their salary could be proportionately lowered or they could be out of a job, while paying more indicates that the organization is paying a premium for the external knowledge. Workers feel this works to their advantage –– they have an opportunity to pick up such knowledge and improve their position in the organization.

About Me

Kevin C. Desouza is an Assistant Professor in the Information School at the University of Washington. He is also Adjunct Assistant Professor in Electrical Engineering at the College of Engineering. He founded the Institute for National Security Education and Research, an inter-disciplinary, university-wide initiative, in August 2006 and served as its Director until February 2008. He currently serves as the Director of the Institute for Innovation in Information Management (I3M). He has seven books to his name. His latest book is Managing Knowledge Security: Strategies for Protecting Your Company’s Intellectual Assets (Kogan Page, 2007). In addition, he has published over 100 articles in prestigious practitioner and academic journals. He has received over $1.2 million of research funding from both private and government organizations. Dr. Desouza is a fellow of the Royal Society of Arts.